SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13
or 15(d) of
The Securities Act of 1934
July 23, 1998
Date of Report (Date of earliest event reported)
BUFFALO CAPITAL V, LTD.
(Exact name of registrant as specified in
its charter)
Colorado 84-1434324
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
7331 S. Meadow Court,
Boulder, Colorado 80301
(Address of Principal Office) Zip Code
Registrant's telephone number, including area code: (303) 530-3353
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On July 23, 1998, the Company entered into a letter of intent with
Aladdin Oil Corporation, a Nevada corporation ("Aladdin"), regarding
a possible business combination. Pursuant to the terms of the letter of
intent, the transaction would most likely be structured as a merger of
Aladdin into the Company, would include all of the assets of both
entities, and would occur as soon as possible after the approval of the
proposed transaction by the shareholders of each of the parties.
The letter of intent contemplates that upon completion of the proposed
business combination, the current shareholders of Aladdin will receive
shares of common stock equal to approximately 93% of the issued and
outstanding common stock of the Company, on a fully diluted basis,
and that the current shareholders of the Company will retain ownership
of approximately 7% of the Company's issued and outstanding
common stock. The letter of intent also contemplates that all presently
outstanding Class A and Class B Warrants will be cancelled at closing,
and that the Company will issue shares of its Series A Preferred Stock
to the existing holders of Series A Preferred Stock of Aladdin and
warrants to the existing holders of Aladdin warrants on the same terms
contained therein.
Under the terms of the letter of intent, Aladdin would also be required
to pay cash consideration of $125,000 to Buffalo or its affiliates at
closing. Upon execution of the letter of intent, Aladdin paid a cash
deposit of $25,000 which will become non-refundable upon completion
of certain conditions by the Company.
In the event the proposed transaction is completed as contemplated, it
will result in a change in control of the Company. In conjunction with
such a change in control, it is contemplated that the current officers
and directors of the Company would resign and be replaced by the
current officers and directors of Aladdin, and that the name of the
Company would be changed to Aladdin Oil Corporation.
The parties have not yet entered into a definitive agreement relating to
the proposed business combination, and there is no assurance that the
parties will be able to finalize and agree upon the terms of such a
definitive agreement. Any such definitive agreement will include
certain conditions precedent to closing of the proposed business
combination, including, but not limited to, approval of the transaction
by the shareholders of both parties. Accordingly, even in the event
that the parties do finalize and execute a definitive agreement, there is
no assurance that the proposed business combination will be
completed.
ITEM 7. FINANCIAL STATEMENTS AND
EXHIBITS
(c) Exhibits.
Exhibit 99 - Letter of Intent dated July 23, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BUFFALO CAPITAL V, LTD.
(Registrant)
August 14, 1998
(Date)
/s/__________________________
(Signature) Grant W. Peck
President
*Print name and title of signing officer under his signature.
<PAGE>
Exhibit 99 - Letter of Intent Dated July 23, 1998
BUFFALO CAPITAL V, LTD.
7331 South Meadow Court
Boulder, Colorado 80301
July 23, 1998
Ms. Meghan Robins
President and Chief Executive Officer
Aladdin Oil Corporation
11911 San Vicente Boulevard
Los Angeles, California 90049
Re: Proposal to Enter into a Combination with
Buffalo Capital V, Ltd.
Dear Ms. Robins:
This letter is intended to summarize the principal terms of a proposal
being considered by Buffalo Capital V, Ltd., a Colorado corporation
("Buffalo"), regarding its possible combination (the "Transaction") with
Aladdin Oil Corporation, a Nevada corporation ("Aladdin"). In this
letter, (i) Buffalo and Aladdin are sometimes called the "Parties", (ii)
Buffalo and its affiliates, if any, are collectively called "Buffalo," and
(iii) Aladdin's possible combination with Buffalo is sometimes called
the "Possible Combination."
PART ONE
The Parties wish to commence negotiating a definitive written
agreement, most likely a merger agreement, providing for the Possible
Combination (a "Definitive Agreement"). To facilitate the negotiation
of a Definitive Agreement, the Parties request that Aladdin's counsel
prepare an initial draft. The execution of any such Definitive
Agreement would be subject to the satisfactory completion of each
Party's on-going investigation of the other Party's business and
properties, and would also be subject to approval by each Party's
shareholders.
Based on the information currently known to Buffalo, it is proposed
that the Definitive Agreement include the following terms:
1. Basic Transaction Structure: The Transaction will be
structured most likely as a merger of Aladdin into Buffalo. The
closing of this transaction (the Closing") would occur as soon as
possible after the approval of the Transaction by the shareholders of
each Party. It is agreed that best efforts shall be undertaken by both
Parties to close the Transaction by September 15, 1998. If requested
by Aladdin, a 30-day extension to the closing date shall be granted by
Buffalo to accommodate any necessary issues that may arise. If the
Transaction closes prior to September 1, 1998, the effective date of the
Transaction shall be the closing date. If the closing occurs later than
September 1, 1998, the effective date of the Transaction shall be
12:01 a.m., Pacific Daylight Time, on September 1, 1998.
2. Transaction Terms:
(a) Definitive Agreement. The Parties will use best efforts to
enter into the Definitive Agreement within 30 days following the
execution of this Letter of Intent. Such Agreement will specify the
time and manner of closing, the effective date of the change of control
the obligations of the Parties respecting the Transaction, and will
contain representations, warranties, covenants and indemnities
customary in transactions of this nature.
(b) Interests. This Transaction will include all of the assets of
Buffalo in addition to the assets of Aladdin, including all right, title
and interest in and to the assets presently owned by Aladdin, including
but not limited to all subsurface easements, all leasehold, all mineral
and fee interests, all equipment, records and technical information and
all other rights associated with or existing as a consequence of the
ownership of the assets.
(c) Structure. The final structure of the Transaction related to the
form of legal combination shall be determined and documented within
the Definitive Agreement. Such form of Transaction shall be based
upon the legal and accounting advice received by Aladdin. It is
expected that the Transaction will be tax-free to Aladdin and its
shareholders. Further, the tax basis of the assets of Aladdin will not
change as a result of the Transaction.
(d) Capital Structure of Buffalo. Upon completion of the
Transaction, shareholders of Aladdin will receive shares equal to 93%
ownership of Buffalo on a fully diluted basis. For the purposes of this
agreement, "fully diluted" shall mean all shares of common stock
issued and outstanding, plus the common shares that would be issued
if 100% of the current Preferred Shares of Aladdin were converted
into common stock.
Prior to the closing, Buffalo will have issued and outstanding 406,099
shares of common stock. Upon closing, 3,718,320 shares of Buffalo
shall be issued to shareholders of Aladdin on a pro rata basis.
In addition, Buffalo will cancel all outstanding stock purchase options
and warrants prior to closing. At closing, Buffalo will issue 1,677,000
share of Series A Preferred Stock (with the same terms and conversion
features as are contained in Aladdin's Series A Preferred Stock) to the
existing holders of Aladdin Series A Preferred Stock on a one-for-one
basis.
Buffalo will also, subsequent to closing, issue stock purchase warrants
(with the same rights and privileges as are contained in Aladdin's
outstanding stock purchase warrants) to warrant holders of Aladdin on
a one-for-one basis.
It is currently anticipated at this time that, upon closing, total common
shares issued and outstanding shall equal 4,124,419 shares.
(e) Governance. Upon the consummation of the Transaction,
Buffalo's current officers and directors will resign and new officers
and directors, designated by Aladdin will be installed.
(f) Post-Closing Items. It is the intent that, upon the completion
of this Transaction, a change of control will have occurred. Towards
this end, on-going operations of the combined company shall be the
responsibility of Aladdin, including SEC filings, quarterly reports and
shareholder relations. Furthermore, Buffalo will appoint to its Board
the current members of Aladdin's Board and each existing member
shall subsequently resign. The name of Buffalo will be changed to
Aladdin Oil Corporation, and the trading symbol will be changed to
reflect better the new name of the Company.
At closing, any and all employment agreements and/or consulting
agreements previously entered into by Buffalo shall be terminated, and
such agreements made by Aladdin shall be assumed by Buffalo.
3. Other Terms:
(a) Representation and Warranties. Each Party will make
customary and comprehensive representations and warranties to the
other Party. Such will include, without limitation, warranties and
representations regarding organization, capitalization, authority to enter
into agreements, financial statements, consents and approvals,
litigation, absence of any material adverse change, undisclosed
liabilities, SEC documents (including timely filing of forms and
exhibits in compliance with form), environmental matters, full
disclosure, tax matters (including without limitation, tax return filings
and payment of all applicable federal, state and local taxes), and
compliance with laws and employee benefit matters.
(b) Conditions of Closing. The consummation of the Proposed
Combination by each Party would be subject to the satisfaction of
various conditions, including:
- - No misrepresentation or breach of covenants and warranties;
- - No material adverse change in the business, affairs or condition
of the Parties;
- - No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of
the Transaction shall be in effect;
- - All consents of governmental and regulatory authorities
obtained;
- - All other necessary consents from other parties to all material
contracts, leases, agreements and permits;
- - Approval by the shareholders of the Parties of the Transaction
(including election of Aladdin director nominees) including, if possible
without requiring compliance with the regulation provisions of the
Securities Act of 1933, as amended, approval of reincorporation of the
combined company under the laws of the State of Nevada;
PART TWO
The following paragraphs of this letter (the "Binding Provisions") are
the legally binding and enforceable agreements of the Parties.
1. Due Diligence. This Letter of Intent is subject to:
(a) Reasonable satisfaction as to the filing status of Buffalo and its
standing as a "public" company.
(b) Satisfactory due diligence examination by each Party of the
business and records of each Party.
(c) Such other due diligence as each Party deems appropriate.
2. Transaction Protection. Until 90 days after the date of
execution of this Letter of Intent:
(a) Each Party will not, directly or indirectly, through any
representative or otherwise, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept or consider any
proposal of any other person relating to the acquisition of or
combination of either of the Parties, their respective shares, assets or
business, in whole or in part, whether directly or indirectly, through
purchase, merger, consolidation, or otherwise (other than sales of
property in the ordinary course); and
(b) Each Party will immediately notify the other regarding any
contact between a Party and any other person regarding any such offer
or proposal or any related inquiry.
3. Compensation. Upon execution of this Letter of Intent,
Aladdin shall pay to Buffalo Capital V, Ltd. $25,000 which shall
become non-refundable once the Form 15c-2(11) of Buffalo has been
approved by the NASDAQ. Further cash compensation shall equal
$100,000 payable upon closing. However, Aladdin shall have the right
to pay $50,000 upon closing and the remaining $50,000 in 90 days if
such an agreement can be reached. In the event that the remaining
$50,000 is made in installment payments, separate note and
security/guarantee agreements shall be executed delineating the terms
and conditions of such payments.
4. Conduct of Business. During the period from the date this
Letter of Intent is signed by both Parties until a Definitive Agreement
is signed or negotiations for a Definitive Agreement are terminated,
each Party shall operate its business in the ordinary course and shall
refrain from any extraordinary transactions.
5. Confidentiality. Except as and to the extend required by law,
each Party will not disclose or use, and will direct its representatives
not to disclose or use to the detriment of the other Party any
Confidential Information (as defined below) with respect to a Party
furnished, or to be furnished, by one Party to the other, or its
respective representatives at any time or in any manner other than in
connection with its evaluation of the transaction proposed in this letter.
For purposes of this Paragraph, "Confidential Information" means any
information about a Party stamped "confidential" or identified in
writing as such by one Party to the other promptly following its
disclosure, unless (a) such information is already known to the other
Party or its representatives or to others not bound by a duty of
confidentiality or such information becomes publicly available through
no fault of the other Party or its representatives, (b) the use of such
information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of
the Possible Combination, or (c) the furnishing or use of such
information is required by or necessary or appropriate in connection
with legal proceedings. Upon written request of a Party to the other,
each Party will promptly return to the other or destroy any
Confidential Information in its possession and certify in writing to the
other Party that it has done so. The Parties agree to execute a separate
mutual confidentiality agreement acceptable to the Parties.
6. Disclosure. Except as and to the extend required by law,
without the prior written consent of the other Party, neither Party will
make, and each will direct its representatives not to make, directly or
indirectly, any public comment, statement, or communication with
respect to, or otherwise to disclose or to permit the disclosure of the
existence of discussions regarding a possible transaction between the
Parties or any of the terms, conditions, or other aspects of the
transaction proposed in this letter. If a Party is required by law to
make any such disclosure, it must first provide to the other Party the
content of the proposed disclosure, the reasons that such disclosure is
required by law, and the time and place that the disclosure will be
made.
7. Legal and Other Fees. Aladdin shall pay all of its legal fees
incurred in this Transaction and up to $5,000 of legal fees incurred by
Buffalo. Buffalo shall be responsible for the payment of any advisory
and/or finder's fees owed by Buffalo. Aladdin shall be responsible for
any and all expenses related to financial advisory, accounting, transfer
agent, and/or regulatory fees related to this Transaction.
8. Entire Agreement. The Binding Provisions constitute the
entire agreement between the Parties, and supersede all prior oral or
written agreements, understandings, representations and warranties, and
courses of conduct and dealing between the Parties on the subject
matters hereof. Except as otherwise provided herein, the Binding
Provisions may be amended or modified only by a writing executed by
all of the Parties.
9. Governing Law. The Binding Provisions will be governed by
and construed under the laws of the State of Nevada without regard to
conflicts of laws principles.
10. Counterparts. This Letter may be executed in one or more
counterparts, each of which will be deemed to be an original copy of
this Letter and all of which, when taken together, will be deemed to
constitute one and the same agreement.
11. No Liability. The paragraphs and provisions of Part One of
the Letter do not constitute and will not give rise to any legally
binding obligation on the part of any of the Parties. Moreover, except
as expressly provided in the Binding Provisions (or as expressly
provided in any binding written agreement that the Parties may enter
into in the future), no past or future action, cause of conduct, or failure
to act relating to the Possible Combination, or relating to the
negotiation of the terms of the Possible Combination or any Definitive
Agreement, will give rise to or serve as a basis for any obligation or
other liability on the part of the Parties.
If you are in agreement with the foregoing, please sign and return one
copy of this letter agreement, which thereupon will constitute our
agreement with respect to its subject matter.
Very truly yours,
BUFFALO CAPITAL V, LTD.
By: /s/
Grant W. Peck
President
Duly executed and agreed
as to the Binding Provisions
on ______________________, 1998
ALADDIN OIL CORPORATION
By: /s/
Meghan Robins
President and Chief Executive Officer
